Treasury Secretary Scott Bessent told President Trump yesterday that the federal investigation into Fed Chair Jerome Powell "made a mess" and could be bad for markets, two sources familiar with their call tell Axios' Marc Caputo.

• 😡 One source tells Axios: "The secretary isn't happy, and he let the president know."
• 🪏 Bessent "thought that when the president named a new Fed chair, that Powell would go. But now that's not going to happen," one source said. "Now [Powell is] dug in. This really made a mess of things."

Bessent didn't question the investigation and wasn't defending Powell, the sources tell Axios.

• ☀️ A Treasury spokesperson told us: "There is zero daylight between Secretary Bessent and President Trump. The sources in the story do not speak for the secretary."

🏗️ Trump is distancing himself from the probe, which involves allegations that Powell misrepresented the costs of renovations at the Fed's D.C. headquarters.

• 📺 "I don't know anything about" the related subpoenas, Trump told NBC News yesterday.
• 🎥 Powell, in a video yesterday: "The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president."

The office of Jeanine Pirro, U.S. attorney for the District of Columbia, launched the probe without warning Treasury, White House officials or the main Justice Department, sources tell Axios.

• A spokesperson for Pirro's office couldn't be reached.
• A DOJ spokesperson said the department doesn't comment on investigations.

Senior administration officials tell Axios they believe the idea came partly at the urging of Federal Housing Finance Agency Director Bill Pulte.

• Pulte to Bloomberg TV today: "The DOJ is outside of my purview. This is out of my purview. I don't know anything about it, and I would defer you to the DOJ."

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Child care providers are facing their greatest test yet as the Trump administration imposes new funding rules, Axios' Emily Peck reports.

• 💰 Federal money underpins the entire child care industry, vital to millions of American families.

🧑‍⚖️ A federal judge has temporarily blocked the administration from freezing more than $10 billion for child care in five blue states on its claims of widespread fraud.

• The administration is also asking states to better justify their spending — a request that some state officials and advocates say is onerous.

Some states are trying to fund their own efforts.

• New York Gov. Kathy Hochul (D) and New York City Mayor Zohran Mamdani (D) recently proposed a massive investment toward universal statewide child care.

Yet they can only do so much.

• 📞 Sarah Rittling, executive director of First Five Years Fund, an advocacy group: "What undergirds all of this is the federal programs, they hold all this up."

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1. Dina Powell McCormick, a prominent banking executive and former Republican official, is joining Meta full-time as president and vice chair, reporting to Mark Zuckerberg. "Dina will be a member of Meta's management team, helping guide the company's overall strategy and execution," the announcement says. Expect her to serve as capital markets czar, both raising and deploying capital. More from Sara Fischer.
2. 🪖 Sen. Mark Kelly (D-Ariz.) is suing to stop Defense Secretary Pete Hegseth from targeting his Navy rank over a video that President Trump called "seditious." Go deeper.
3. 📱Apple is partnering with Google for Gemini-powered AI upgrades to Siri later this year. Apple has been under pressure to upgrade its voice assistant with the latest AI tech. Go deeper.
4. 🛒 Discount grocer Aldi plans to open more than 180 new stores across 31 states this year. Go deeper.

Lego's newest kit is designed to help kids learn about AI systems, Axios' Ina Fried reports.

• The educational sets include plastic bricks, interactive hardware and charging cords — plus age-appropriate curriculum for elementary and middle schools.

🛹 In one lesson for middle schoolers, students use computer vision to make sense of a Lego figure doing skateboard tricks, similar to real-life athletes and teams using AI to review their performance.

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